An EU directive that came into force in 2003/2004, which outlawed certain types of trading based on inside information and outlawed certain types of abuse in the financial markets. The Regulation on Wholesale Energy Market Integrity and Transparency (REMIT) is partially modelled on MAD. MAD II, due to come into force in 2014/2015, updates MAD, unifying its implementation across Europe and widening its scope to include new instruments. MAD II changes the obligation to report and widens the scope of the market abuse provisions as well as the inside information provisions. It also requires criminal sanctions for certain types of breach. It is implemented both as a ‘directive’ (MAD II) and a ‘regulation’ (MAR).
Commodity trading and risk management is a subject that is necessarily complicated, and is becoming more so. The Energy Risk Glossary seeks to disentangle and clarify the jargon by providing definitions of commonly used energy and commodity market terms.
These include definitions related to a variety of underlying energy products, as well as technical terms about the many instruments and benchmarks used by energy market participants.
Many of the most recent terms to have been added to our glossary stem from the actions of regulators since the 2008 global financial crisis. The onset of rules, such as the US Dodd-Frank Act and European Market Infrastructure Regulation, has markedly increased the cost and complexity associated with commodity trading. Perhaps they have also increased the need for a handy reference guide such as this.
The glossary is extensively cross-referenced, making for easy and thorough searches. We hope you find the latest edition of the Energy Risk Glossary to be a useful resource.
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